Changing China

transforms

Internet landscape

By Gui Tao, Huang Yan, Gui Juan, Liu Jinhui, Guo Yujing,

Cao Bin, Zhang Yao and Wang Ruoyao

Twenty years after the world’s most populous country gained access to the Internet, China has been fundamentally and irreversibly changed, but not in the way some Western prophets had expected.

Instead of bringing collapse, the Internet in China is becoming more commercially robust and innovative despite the unique Chinese way of management.

As the Internet reshapes China, China is also changing the online landscape through its rising Internet firms, brand-new products and the world’s largest web population of 618 million.

CHINA REMOLDED

On April 20, 1994, a pilot network to serve education and scientific research was linked to the Internet via a special line in Beijing’s Zhongguancun, now China’s technology hub, marking the country’s first fully functional Internet access.

At the time, the only way for most Chinese to learn of South Africa’s newly elected black president and the construction of China’s massive Three Gorges hydraulic project was by reading the next day’s state-run newspaper.

Recalling his first days online, Liu Ren, a Beijing-based journalist, said few Chinese were in cyberspace in the late 1990s.

“I would be overjoyed to receive an email, even if it was a spam mail at that time,” said the reporter renowned for his keen observation of China’s IT industry. “But today, the Internet has been changing everyone’s lives, sometimes even against their will.”

Older cab drivers are consulting their children to learn how to use taxi apps for additional tips from potential customers.

“Never did I think that one day my work would have anything to do with the Internet,” said Lao Liu, a 54-year-old taxi driver in central China’s Wuhan City. “The apps bring me an additional income of 50 yuan (8 U.S. dollars) every day.”

Mobile Internet is changing the entrenched habits of Chinese people like Lao Liu, including how they read, buy things, and manage money.

Yu’ebao, a popular online wealth management product, has raised around 500 billion yuan in less than a year, helping boost the funds available for China’s real economy, instead of raising financing costs.

In March, China vowed to promote the healthy development of its burgeoning Internet finance, giving products like Yu’ebao promising prospects.

The growing population of Internet users has also made online opinions too important to be ignored by officials.

The transformative power of the Internet has challenged top-down communication patterns in China by supporting multi-level and multi-directional flows of communication, changing the country’s political landscape.

Several Chinese officials have been probed after online whistleblowers accused them of corruption, the latest being Song Lin, chairman of state corporation China Resources (Holdings).

China’s Internet has become an accessible yet decentralized platform for the public to discuss public affairs and breaking events, said Wang Sixin, professor of law with the Communication University of China.

INNOVATION

The rising prominence of China is one of the most important developments shaping the Internet.

Behind China’s Internet boom is Beijing’s unique way of management. China has long been dedicated to developing the Internet, but it has also underscored the rule of law to ensure Internet security, which Chinese President Xi Jinping said is a concern for the country’s security and development.

Xi became head of China’s central Internet security and informatization leading group in February, revealing the country’s resolve to build itself into a strong cyber power.

This way of Internet management, itself a Chinese innovation, has not stifled the creativity of the Internet as some had predicted. Innovative Internet products and services are significantly changing the landscape of the Internet.

At least six of the world’s 10 largest social networks in 2013 were developed by Chinese Internet firms, according to a report from U.S. business and technology news website Business Insider. China-based social networking apps such as WeChat and Sina Weibo have achieved significant scale.

Weibo, China’s answer to Twitter, debuted this month on the Nasdaq exchange with a 19.1 percent jump, bringing the company 287 million U.S. dollars.

The success of the microblogging service, which official figures say over 500 million are using, highlighted the innovation-driven development of China’s Internet companies.

Weibo may have imitated Twitter at first, but it adapted and improved by constantly introducing new functions to maintain a high number of active users.

“More Chinese Internet companies will be going abroad like Weibo did,” said Fang Xingdong, founder of Blogchina.com and an IT columnist. “The year of 2014 will mark the beginning of the global strategy of China’s Internet.”

In 2013, China’s online retail market expanded to over 1.8 trillion yuan, almost the size of Malaysia’s GDP that year.

“We have built up the Chinese people’s trust in online transactions,” said Jack Ma, founder of China’s e-commerce giant Alibaba.

China will become “more open, more transparent, more willing to share” in the next two decades because of the Internet, he said.

China on frontlines of

cyber security threat

By Li Zhihui and Shen Yang

Twenty years after it embraced the Internet, China has become a cyber giant, but a weak one vulnerable to a skyrocketing number of threats.

Since China formally became a member of the global Internet club on April 20, 1994, Internet users had grown to 618 million at the end of last year, the largest number in the world.

However, due to the lack of technologies, experience and strong teams to counter online crime, China finds itself embroiled in cyber security threats from both within and outside the country, especially from the West.

A sign of China’s weakness in cyberspace is the fact that China annually imports CMOS chips worth more than 200 billion U.S. dollars, which far exceeds its crude oil imports, according to Deng Zhonghan, a member of the Chinese Academy of Engineering.

Disadvantages in software and hardware for information technologies mean Chinese government and industries are unprepared for cyber-espionage. Any sabotage could pose dangers to the country’s security and development as well as people’s lives and work, experts say.

The situation became more urgent after Edward Snowden, a former U.S. National Security Agency (NSA) contractor, said the U.S. had been hacking into institutions based on the Chinese mainland.

The NSA has also been spying into the servers of Chinese company Huawei’s sealed headquarters, according to revelations by The New York Times and Der Spiegel, which the U.S. has not denied.

The spread of online crimes, including the dissemination of rumors and pornography, are also threatening social stability, forcing authorities to enhance campaigns to clean up cyberspace.

To better coordinate Internet security and informatization work among different sectors, China has set up a central Internet security and informatization leading group led by President Xi Jinping to turn the nation into an “Internet power.”

“Without cyber security, there is no national security,” Xi warned.

NO BUSINESS IS IMMUNE

China’s National Computer Network Emergency Response Technical Team Coordination Center said in its latest annual report that nearly 11 million Chinese PCs were infected last year. Of these, 30 percent of the attacks stemmed from U.S. sources.

About 15,000 computers were hit by Trojan Horse malware and 61,000 websites were targeted with backdoor attacks that originated overseas.

Wang Minghua, the center’s operation department director, said threats to China’s economic information security are rising as the center settled more than 10,000 cases of phishing websites targeting Chinese banks, a 55 percent increase compared with that of 2012.

Safety risks could affect Internet trade platforms and mobile payment applications and relevant industries as well as consumers’ privacy, he said.

Government websites also frequently fall victim to hacker attacks, with more than 600 targeted in 2013.

The official site of the People’s Bank of China was hacked on Dec. 19 last year after it curbed bitcoin transactions in China, the center said.

Officials said the fundamental reason for China’s exposure to the cyber threat is the lack of key technologies, including CPUs, operating systems, databases, high-end servers and telecommunications facilities.

All these core technologies and products have long been monopolized by developed countries, so that the systems of China’s government and military departments face severe potential threats of intrusion, said Qiu Shanqin, director in charge of software and integrated circuit sector under the Ministry of Industry and Information Technology.

China’s IT market has been dominated by Western giants, including Microsoft, Cisco, IBM, Intel and Apple, while Chinese telecommunications equipment server Huawei has been denied access to the U.S. market for years.

Ironically, while China itself is a victim of cyber crimes, the country has recently come under frequent criticism from other countries, including the United States, which claimed the Chinese government was behind hacking activities targeting their countries.

Cyber attacks from the United States have been as serious as the accusations from Washington, said CNCERT director Huang Chengqing.

China’s Ministry of Foreign Affairs and Ministry of National Defense have refuted the accusations, reiterating China’s resolve in combating cyber crimes and calling for the international community to fight hacking.

“CYBER ARMY”

President Xi has called for fostering a “politically firm, professionally competent and morally upright” team to build an “Internet power.”

Experts say teams must be good at developing key technologies, including CPU and cloud computing, countering online crimes, and international cooperation.

Huai Jinpeng, an academician of the Chinese Academy of Sciences, said talents in the government, the military and critical IT companies must unite to promote research and bolster information sharing.

Inspiring innovation under favorable government policies is the key to casting off China’s excessive dependence on overseas equipment and information systems, he said.

China will also make a law on cyber security this year, according to a legislation plan released by the Standing Committee of the National People’s Congress, China’s top legislature.

The legislative efforts will help coordinate major sectors to better manage information online, protect key infrastructure facilities and clean up cyberspace, Huai said.